Accrual-basis Cash-basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers in advance, $60O. 2. Pay utilities bill for the previous month, $150. 3. Pay for insurance one year in advance, $2,000. 4. Pay workers' salaries for the current month, $800. 5. Incur costs for employee salaries in the current month but do not pay, $1,000. 6. Receive cash from customers at the time of service, $1,700. 7. Purchase office supplies on account, $330. 8. Borrow cash from the bank, $4,000. 9. Receive cash from customers for services performed last month, $750. 10. Pay for advertising to appear in the current month, $450.
Accrual-basis Cash-basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers in advance, $60O. 2. Pay utilities bill for the previous month, $150. 3. Pay for insurance one year in advance, $2,000. 4. Pay workers' salaries for the current month, $800. 5. Incur costs for employee salaries in the current month but do not pay, $1,000. 6. Receive cash from customers at the time of service, $1,700. 7. Purchase office supplies on account, $330. 8. Borrow cash from the bank, $4,000. 9. Receive cash from customers for services performed last month, $750. 10. Pay for advertising to appear in the current month, $450.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Consider the following transactions
Required:
For each transaction, determine the amount of revenue or expense, if any, that is recorded
under accrual-basis accounting and under cash-basis accounting in the current period.
![Accrual-basis
Cash-basis
Transaction
Revenue Expense Revenue Expense
1. Receive cash from customers in
advance, $60O.
2. Pay utilities bill for the previous
month, $150.
3. Pay for insurance one year in
advance, $2,000.
4. Pay workers' salaries for the current
month, $800.
5. Incur costs for employee salaries in the
current month but do not pay, $1,000.
6. Receive cash from customers at the
time of service, $1,700.
7. Purchase office supplies on account,
$330.
8. Borrow cash from the bank, $4,000.
9. Receive cash from customers for
services performed last month, $750.
10. Pay for advertising to appear in the
current month, $450.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F24607296-bc4b-4232-8d04-3050836d6749%2F3931b102-c2a5-4de9-a599-05f043cb2d6a%2Fpelzroa.png&w=3840&q=75)
Transcribed Image Text:Accrual-basis
Cash-basis
Transaction
Revenue Expense Revenue Expense
1. Receive cash from customers in
advance, $60O.
2. Pay utilities bill for the previous
month, $150.
3. Pay for insurance one year in
advance, $2,000.
4. Pay workers' salaries for the current
month, $800.
5. Incur costs for employee salaries in the
current month but do not pay, $1,000.
6. Receive cash from customers at the
time of service, $1,700.
7. Purchase office supplies on account,
$330.
8. Borrow cash from the bank, $4,000.
9. Receive cash from customers for
services performed last month, $750.
10. Pay for advertising to appear in the
current month, $450.
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